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Sep 16, 2017 10:27 AM IST | Source:

This week in banking: IndusInd-Bharat Fin merger on cards, Bandhan Bank announces IPO plans

IndusInd Bank on Monday said it has entered into an exclusivity agreement with Bharat Financial to evaluate possibility of a strategic deal between them.

Beena Parmar @BeenaParmar
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Banking sector this week started with two major announcements —IndusInd Bank announcing its exclusive merger talks with microfinance lender Bharat Financial Inclusion and Bandhan Bank gearing up for its IPO (initial public offering).

A trend of retail push, as per Reserve Bank of India data, showed at a time when the corporates are defaulting on loans and demand is weak, banks are making merry on the unsecured portfolio with the help of your credit cards and personal loans with over 30 percent growth in the past one year.

In another push, country’s largest private lender ICICI Bank has launched a festive cashback offer on its debit and credit card spends for its customers availing home loans in the three-month period till November 30.

Insolvency and Bankruptcy news

In the insolvency and bankruptcy news, the Supreme Court directed Jaypee Associates, parent of Jaypee Infratech, to deposit Rs 2000 crore by October 27 and that the insolvency professional must submit an interim resolution plan within 45 days.

On the insolvency front, banks are going slow in filing large new corporate cases at the National Company Law Tribunal (NCLT) and observing the current progress of the 12 large accounts in the insolvency proceedings.

However in one case, foreign lenders – DBS and Standard Chartered Bank - have filed for insolvency against Ruchi Soya Industries, a 30-40 defaulters in the second list that RBI sent to banks, asking them to conclude a debt resolution process by December 13 this year.

IndusInd to merger with Bharat Financial

Almost 20 years after its birth, Bharat Financial Inclusion initially conceived as SKS Microfinance, India’s first listed micro finance institution (MFI), will soon merge with mid-sized private lender IndusInd Bank in a likely all-stock deal.

Bandhan Bank IPO

Announcing its plans to go public, new age private sector lender from Kolkata, previously an MFI, Bandhan Bank appointed Goldman Sachs Group, JPMorgan Chase, Axis Bank, JM Financial and Kotak Mahindra Bank as lead managers to manage its proposed IPO.

A Crisil report released this week suggested that stressed assets in the banking system are not expected to rise significantly from current levels of Rs 11.5 lakh crore, or 14 percent of total advances.

Aircel denies insolvency reports

Telecom firm Aircel is planning to file for bankruptcy under the Insolvency and Bankruptcy Code (IBC), according to a report by CNBC-TV18.  Aircel, which is wholly owned subsidiary of Maxis, has a total debt of Rs 16,000 crore out of which Rs 12,000 crore is Indian debt.

The company however, denied filing for bankruptcy, according to a report in The Economic Times.

Bullet trains to create jobs

In some interesting news as India takes a giant leap with plans to have a bullet train, it is estimated that about 20,000 jobs will be created from it, according to a State Bank of India research note.
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